Philadelphia Reflections

The musings of a physician who has served the community for over six decades

Related Topics

Healthcare Reform:Saving For a Rainy Day
Lifetime Health Savings Accounts

Half-Started HSAs

There's another quirk in the law, which may or may not endure. You don't need a linked high-deductible insurance policy to withdraw money from an HSA, but you do need it, to deposit more money. If you take advantage of that, watch out for the rule that you can't have two government plans at once, including Obamacare, Medicare, Medicaid, and Veterans Health Benefits. So it's best to take out the HSA first, then the other insurance. This is such a complicated process, it might very well change, so be sure to ask before taking any action.

In any event, the suggestion seems valid at the moment, that the worst to happen to you is to acquire a tax-deductible account which you aren't entirely free to liquidate until you retire. And it has a health insurance feature which is also tax-deductible to the extent it has been funded, but which can be used to empty the account if you are strapped for money. If you have other sources of funds, it probably would be best to spend the first, since doubly-deductible health insurance is hard to find.

Originally published: Wednesday, October 22, 2014; most-recently modified: Sunday, July 21, 2019